Hi guys,

I noticed that during a couple of trades that a swap was in position. I read a few articles on the subject but I am unsure how it works within a trade and what it is trying to achieve for me or the broker....

Can anyone explain it in layman's terms for me...


Many thanks

Chris

From babypips.com....
The simultaneous buying and selling of the same amount of a given currency at a forward exchange rate.

The broker makes a trade in the opposite direction as your trade is going hedging the bet. The bank the broker borrows the money has an interest rate. That rate on the dollar amount loaned for your trade is what you see on the screen.

How can you get rid of Swaps?

Does it mean you recieve or pay interest?

I really need to know because interest is against my religion.

Thanks

Aussie

Yes that is correct, you do receive and pay interest. Some brokers do offer swap free accounts (mainly for Muslims) so look into that.

Hmm, I just checked out IBFX's website and it seems they've re-introduced their swap-free account offering. Checkout your existing broker's website to see if they offer swap free accounts.

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